What are Unsecured Business Loans

unsecured business loansIn the world of finance and credit, certain players have become huge game changers. Unsecured business loans are one of them. Now, why is that so? Alternative Bridging is here to help us answer that question.

Defined, unsecured business loans are issued and supported only by the borrower’s creditworthiness instead of a type of collateral like a fixed property. Simply put, lenders will only bank on your creditworthiness thereby keeping your properties safe from any risks of forfeiture in case of inability to fulfill payment terms.

Of course, with the high amount of risks for lenders the interest rates may be a little higher compared to a mortgage. At the same time, only individuals or entities that have a good credit standing are likely to be approved.

The very reason why they are considered a game changer is because they cater to a certain group that may not be serviced by other forms of credit that require capital. These are individuals or companies who do not have enough equity in their names for them to be approved a bank loan, a mortgage or any other similar type of credit. Another charm that unsecured business loans have is that in the event of bankruptcy, the court may discharge unsecured loans, unlike secured ones.

Now, how do you manage to get your application approved? We’ll let you in on a few tips below. Read on.

  • Get your financial reports ready. This will always be asked of you anyway so it is best if you prepare for it early on. It saves time and keeps you a few steps ahead. Remember that lenders and financers will gauge creditworthiness and one way to do this is through your financial records.
  • Clean up your files and reports. We do not mean clean up as in “lie or manipulate”. This means that you should ensure that all your records are systematized, purports what they ought to report and are easily understandable.
  • Be transparent with your intentions. It is easier to get any financing approved if you explain how you intend to use the funds. It creates a relationship of trust between you and the lender.
  • Talk about repayment plans. Lenders will want to be repaid of the unsecured business loans you got from them. If you talk about your plans and methods of repaying then you get all the more chances of an approval says Alternative Bridging. It shows your sincerity in following through your responsibility and end of the bargain.

When to Use a Short Term Loan

loansShort term loans, as the name suggests cover a brief period of time often ranging between a few months to three years at most. This is in stark contrast to long term financing which cover at least five to twenty years and sometimes even more. But apart from the obvious, when should you really go for the short route? We’ve asked the experts and here’s what they had to say.

When you need an immediate upgrade…

Not all investments and upgrades are worth an arm and a leg. Some of them do not cost as much and will not require as big of a financing. Plus, the time factor plays a role here. For example, there’s the need to invest in a bigger storage for all your company’s digital files or the purchase of a new delivery vehicle for your restaurant.

When a risk is at hand…

Short term loans, unlike their long term counterparts, don’t take as much time to process and for cash to be released. This makes them the perfect choice for emergency cases and in situations that involve risk. For instance, if you plan on buying a property chances are you’re competing with other investors. You need to drop that security deposit and/or down payment to get hold of it. A provisional patent protection is also another example.

When you’ve got short term costs…

Let’s say that you’re a shoe manufacturer. For the season, demand has doubled thanks to an order placed by a foreign client. However, you do not have enough machinery and labor to cover for the additional hours required to finish off the extra demand. To cover up for the gap, entrepreneurs often take out a short term credit to get the job done without having to get the job done.

When your main financing hasn’t come through…

There will be instances when you thought that you won’t need such a type of financing. You are after all up for your main fund line. Perhaps that bank loan or the mortgage you’ve been waiting for. However, there will be days when they’re not available at the same exact time that you need them. This creates a gap between the transactions, that of your main cash source and that of your purchase. To solve the dilemma, short term credit is taken out which eventually is closed by virtue of one’s long term financing as it arrives.

The Rules and Commandments of Property Bridging Finance

property-bridging-financeProperty Bridging Finance has become an effective and potent method that paves the way for asset acquisitions in spite of the timing constraints when it comes to permanent long term financing.

Because bank loans, sales, income generation and mortgages can take considerable time before they become available for use, many investors and buyers, individuals and organizations alike, have sought for Property Bridging Finance’s rescue.

It allows for the use of a short term temporary loan taken out for a few months to at most a year or two to be used for immediate needs and expenses spent in the search of and the purchase of a property at a time when one’s main fund source isn’t ready or available yet. It is a stop gap measure and connects the need and the financing, thus the term ‘bridging’.

Now just like any other method out there, there are a number of rules and commandments to be followed when using bridging finance and below is a list of them.

  • Transact with quality providers. Make sure to research and find out the best property bridging finance providers in your area. Different companies will vary in rates and terms so be careful as you compare. It would be great if you can find reviews and feedbacks about them.
  • Plan an exit route ahead of time. Albeit temporary, it is still a loan and it must be repaid at a future date. See to it that you plan its payment and closure ahead of time and prior to taking it which brings us to the next item on our list.
  • Choose a payment option that suits you. Property Bridging Finance providers allow borrowers to pay either at maturity date or before it as soon as one can and wants to.
  • Only borrow what is needed. Remember that this is a loan we’re dealing with so over-borrowing won’t be any good. Analyze and examine one’s needs and expenses to come up with a best estimate.
  • Budget and allocate the cash wisely. Property bridging finance unlike its long term counterparts is unrestricted in nature. This means that borrowers may use them whichever they deem fit and wish to. Although this is good news, it does not come with its drawbacks. Users must be disciplined enough to budget and allocate said funds in order to avoid wastages and shortages.

Get more info on bridging finance here: http://www.alternativebridging.co.uk

When Short Term Loans are Wise

Payday loans summitA short term loan is basically a loan with a maturity of five years or less. This is as simple as it gets. There are many types and uses to it and have become a very powerful medium by which both individuals and organizations are able to provide for their immediate cash flow needs. But we have to remember that their use is designed for a purpose and is not meant for everything and everyone. Today, find out when the use of short term loans are considered to be wise with the help from Alternativebridging.co.uk.

  • For Emergency Cases

Even the best companies need a helping hand when a dire situation arises. One can never be certain all the time and certain instances can hit the company leaving it shaken. This is true even with the presence of insurances. A short term loan becomes a safety net for emergencies; for example, natural calamities, accidents or machine breakdowns.

  • For Cash Flow Concerns

When there are not enough liquid funds to generate within one’s pocket and there is a need for instant funding, a short term loan becomes a smart choice without having to commit to any long term contract and wait up. These types of credit do not only cover a shorter period of time but are also able to make cash available faster.

  • For Seasonal Needs

There are cases where a business calls for help with fund shortages brought about by seasonal changes or event trends. Take for example a shoe manufacturing company. It gets an additional 50% order for the month of October thanks to a custom order. The added funds will be able to provide for the extra capital and staffing that one requires while waiting for the next revenue stream.

  • For Tight Situations

Long term loans are far trickier to apply for and the approval process is pretty taxing too. Let’s not forget how long it takes for the cash to be released. Startups and new business are also known to have a very slim chance with them. Good thing, short term loans are present to fix the dilemma.

  • For Growth and Expansion

Financing ventures can also call for short term loans says Alternativebridging.co.uk. The upfront capital here demands immediacy. For example, opening up a new branch may require the purchase of a lot. Of course a down payment is required here and a short term loan shall become a great choice to finance such part of the acquisition given its immediate availability.

How to Budget Property Expenses

expensesBuying a property is no easy deal. Come to think of it, the price tag on an asset is quite hefty on its own and not to mention there are numerous initial costs and post expenses that come after a purchase. One has to be able to budget and plan finances wisely if you want no trouble. Luckily, we’ve talked to the team over at Alternative Bridging and they gladly gave us a few tips!

Know your finance options. There are many options when it comes to financing an asset acquisition. There are short and long term alternatives which all come with their own set of pros and cons. It is important that you analyze your needs wisely so you can find a match that suits it best. Popular examples of funding methods or sources include savings, income, bank loan, mortgage, bridge loan and proceeds from the sale of one’s own asset.

Determine how much you will need. Make a list of all your expenses. You have to first know the property you are planning to purchase because the factors surrounding it will have a lot of bearing. Remember that you will have expenses before, during and after the purchase. You have to consider and include all of them in your list.

Be aware of your limits. Do not go beyond your means. We have different needs and reasons for the acquisition. At the same time, we have varying capacities when it comes to the amount we are willing and are able to spend. Be sure that you don’t go past your limit or all hell shall break loose.

Have the asset surveyed. To get a better grip on the asset’s market value, repair and maintenance costs and property taxes among others, it would be best to have it surveyed beforehand. Never close on a property without doing this. Apart from the numbers, this shall give you some validation as to the condition and life of the asset and whether or not they match what the seller says.

Provide a room for adjustments. It would be impossible to create a budget that matches your actual expenses down to the very last cent says Alternative Bridging so don’t expect it to do so. There will be some variances but your job here is to ensure that they do not go beyond a certain percentage or mark. It still has to be reasonable and within your numbers.

Bridging Loans and When to Use Them

short-term-bridge-loanBridging loans pertain to short term funding used as an interim source or where one has to connect the gap between an immediate need or debt coming due and one’s yet to be available permanent source of funding. Upon the arrival of the latter, the bridge shall then be closed using it. It is for this reason why it has been branded as a stop gap measure.

These bridging loans can be used for a multitude of ways and occasions and today we shall talk about some of them particularly those directed at real estate purchases.

Scenario No. 1: When You Need Resources for Your Search…

Looking for the ideal asset that suits both your needs and financial capacity will need funds. First of all you are likely to spend for a broker or agent. You will have to visit sites and transportation isn’t free. Plus, you will pay for surveyors to examine your prospect properties. If your main fund line hasn’t come through yet, you can use the bridge for the time being.

Scenario No. 2: When You Have to Close on a Good Property…

Time is of the essence because chances are you are not the only buyer who’s aiming to get their hands on a prime asset. The clock is ticking and you need to beat those competitors. The only way for you to get a firm hold and assurance would be to pay for the down payment and security deposit to close a deal. You need a significant amount to do that.

Scenario No. 3: When You Need to Uphold Business Continuity…

Businesses shall have to acquire properties in a timely manner and it should be done in accordance with a certain timeline or else operations shall be ruptured. Delays can occur and that equates to losses. Entrepreneurs want nothing of that and so they use bridge loans to make hasten their acquisitions and avoid such mishaps.

Scenario No. 4: When You’re waiting for A Property Buyer…

One of the many ways that buyers fund for their acquisitions would be through the proceeds of the sale of their present asset or that of a redundant or unused property. Unfortunately, such sales are not certain and they may not happen immediately as wanted. There is no certainty as to their timing which puts investors at a disadvantage. With bridging loans, buyers can already acquire and move into the new place all while waiting for a buyer on their old property.

Commercial Bridging Finance Payment Options

Commercial bridging finance companies like Alternativebridging.co.uk, offers real estate buyers a means to fund their short term liquidity requirements while their permanent resource line is still to be made available. It gets its name from the term ‘bridge’ as it acts to connect two transactions, the first being the sale and the second being the long term financial resource.

Commercial bridging finance is one of the six main types of bridge loans available today alongside open, closed, residential, land and auction types. Apart from providing fast, hassle free and immediate funds to aid in the acquisition of commercial assets, one of its most celebrated advantages would have to be regarding its payment.

You see, commercial bridging finance payment options are described as flexible. In other words, they’re not tight or rigid and limiting thus allowing buyers to not feel strangled and restricted by them but rather helped.

To explain it further, let’s compare the financing method to traditional forms of credit such as bank loans and mortgages. These two are characterized by a strict payment scheme that is scheduled in equal intervals, often in months, and has to be paid on the assigned dates. Full payment must also be completed at maturity.

finance loansBridge loans are not like that. They are considered flexible and non-restricting because users and borrowers have the option to pay them out before or at maturity. Let’s take the two following scenarios for better visualization.

Before Maturity – Should the investor or company be able to come up with the necessary funds equivalent to the value of the bridge taken out, they can already pay and close it even before it has matured or prior to the arrival and availability of one’s long term resources.

At Maturity – Commercial bridge loans and bridging finance in general often has a maturity date set to match the arrival of the anticipated long term fund sources. Since most users make use of the bridge only to pay upfront costs (e.g. down payment, legal expenses, first few installments, etcetera), they are likely to intend using their main fund line to close it out.

Commercial bridging finance and its flexible payment options is indeed a powerful tool for investors, organizations and business entities in their pursuit of acquiring the aforementioned real estate assets. It helps them to avoid opportunity losses, to cut on time, to save on costs brought about by time appreciation and to make use of the acquisition to encourage and boost up their profitability.

BTCJam: The Challenges of Personal Credit

BTCJAM-lendingWith the ever growing challenges of obtaining affordable credit, BTCjam was born in late 2012 and has continued to provide peer-to-peer lending services using Bitcoin. Founded by Brazilian software engineer, Celso Pitta, the company runs its office in San Francisco and has facilitated Bitcoin loans for more than ten million dollars in over two hundred countries worldwide.

The biggest challenge and concern of borrowers by far is the huge levels of interest rates required by traditional financial and lending institutions. Such rates even reach staggering numbers from one country to another. This makes them disadvantageous if not completely infeasible for majority of the population. Furthermore, a huge slump of paperwork is mandated making them very fussy and painstakingly troublesome for many.

Peer-to-peer lending has also been employed by companies similar to BTCjam but what sets the company apart is its ability to attain a wider geographical reach. This was done with the help of “machine learning”, an artificial intelligence designed to rate the reliability of borrowers worldwide. It is of no secret that most if not all financial and lending institutions will require the submission of credit scores. However, that is only mostly achievable by companies. People commonly do not have personal credit scores making it difficult for them to apply for loans. With “machine learning” technology, BTCjam is able to collect data leading to the creation of an instant credit score from their users. This is done upon registration where verifications will be completes building up one’s credit score.

When and How Does Bridging Finance Help Landlords

When it comes to their property investments, landlords will do everything to ensure that their entrepreneurial ventures go nowhere but up. In today’s very challenging real estate market, financing is very crucial to one’s success. After all, properties are often valued significantly. They do not come cheap. One of the popular modes of funding today among investors is the so called bridging finance. So we can’t all help but wonder why landlords favor them a lot? Read more to find out.

Bridging finance is an interim source of resources meaning that it provides for short term needs rather than long term ones. We all know that fixed assets have huge price tags. Not everyone has a bursting bank account filled with money waiting to be spent. There are many investors out there who will have to take on a mortgage, a bank loan or even sell an older property to raise funds for the new investment. The problem with those is that they take time and in the real estate business, time is of the essence. Miss out or procrastinate and your investments could turn unbelievably sour.

In most property acquisitions, the seller, broker or agent will require a down payment. This is required for all assets purchased on credit. There remaining balance are then to be distributed in equal installments within a certain period of time. With a mortgage, bank loan or sale of another asset, the funds can take time to arrive. When this happens, landlords and investors will not have ample resources to pay for the down payment causing them to lose hold of the property. This creates opportunity losses.

bridging-financeAt the same time, inability to have the resources when you need it is detrimental in these types of investments. Keep in mind that properties considered to be highly valuable or so called prime do not stay for sale in the market for long. Moreover, a long queue of people waiting in line should the first buyer default will be present. You need to play your best cards otherwise you will lose. You need to act fast if you want to get hold of the sterling asset.

In all of these cases, bridging finance helps by providing a quick and hassle free option for investors to provide for their short term needs, that is the down payment, initial installments and other expenditures relevant to the purchase. Need more advice? Visit www.alternativebridging.co.uk

How a Commercial Bridging Finance Can Help Your Company

Allow us to ask the question for you. How can a commercial bridging finance help entrepreneurs and their companies? Let’s take a look at the following scenario for better visuals, shall we?

commercial-financeMark is a restaurant owner who wishes to expand his business and open up a new branch in the metro. He has been in the food industry for two years now and business has been doing really well so a new place would certainly be feasible. This will not only widen the restaurant’s market reach and bring in more customers but it can also potentially increase sales and thus profits.

Mark then goes out in search for the best locations and properties for his upcoming branch. After scouring through the internet for hours, going over newspaper adverts and talking to various agents, he finally found the perfect asset. It’s situated right in the heart of the metropolis, has a wide and ample parking space, is sandwiched between establishments like malls, schools and parks, easily accessible for transportation and most of all fits his preferred budget. He goes ahead and applies for a bank loan to fund the transaction.

Here’s the catch though. The property is hot in the market and many buyers are willing to move heaven and earth just to get it. After all, it’s a prime asset. With the characteristics mentioned earlier, it will certainly put any company several steps ahead. Mark’s bank loan application has not yet been approved. We all know how these funding methods work. They take a lot of paper work and time most especially. What can Mark do now? Will he give up and move on to looking for another place? Is there even a workaround? Yes and with the help of a commercial bridging finance.

Commercial bridging finance is a type of interim funding method that caters to the short term needs of commercial property buyers. They are referred to as a “bridge” given their ability to connect and fill in the fund gap between the main or permanent source of funding, in Mark’s case the bank loan, and the acquisition in the event that the permanent source has not been made available in time. The application to approval process is pretty fast with lesser paper work involved too. The repayment methods are flexible and restrictions on the use of the funds are not around to hamper your strategies. This way, Mark will be able to acquire the property, use it for his restaurant and win against all the other buyers!